Chinese companies indicted, accused of stealing trade secrets from Micron

Frederick Owens
November 3, 2018

The US Department of Justice (DoJ) has filed charges against state-owned Chinese chip maker Fujian Jinhua Integrated Circuit and Taiwanese foundry United Microelectronics Corporation (UMC), along with three Taiwanese citizens, accusing them of having stolen trade secrets from US memory maker Micron.

Lawyer General Jeff Sessions stated, "Chinese monetary espionage on the USA has been increasing, and it has been expanding quickly".

"Taken together, these cases and many others like them paint a grim picture of a country bent on stealing its way up the ladder of economic development and doing so at American expense", Session said.

The Justice Department also will target Chinese threats to US companies that provide components for sensitive technologies, especially those in the telecommunications sector as it readies for the transition to 5G networks.

According to the DOJ, the value of the documents stolen by Chen, Ho, and Wang may be anywhere between US$400 million and US$8.75 billion dollars. Chen also hired former MMT employees J.T. Ho and Kenny Wang to allegedly bring trade secrets over from Micron.

The Trump administration has slapped $250 billion in tariffs on Chinese products. "I applaud the Department of Justice for using one of those tools today to hold China accountable, and encourage the Administration to take additional steps to crack down on economic espionage by Chinese businesses and the Chinese government".

But it's this Chinese government's interference to protect its investments as part of its Made in China 2025 economic plan that got U.S. authorities to act, first through an export ban, and now through today's charges.

Chen recruited numerous employees of the Micron subsidiary to work with him at UMC, according to the USA, including He Jianting, also known as J.T. Ho, and Wang Yungming, also known as Kenny Wang.

Congress in August passed the Foreign Investment Risk Review Modernization Act to expand the government's power to review investments from foreign countries - a response to China's efforts to obtain USA technology through mergers, acquisitions and takeovers.

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The state-owned firm named in the indictment, Fujian Jianhua, is a Chinese semiconductor manufacturer that was already targeted by the U.S. earlier this week when authorities slapped a ban on USA exports to the company.

Micron is the only US-based company that manufactures DRAM. Other cases have involved stolen wind turbine technology and software source code.

According to the indictment, the Taiwanese nationals downloaded more than 900 confidential files from Micron.

The foreign agents' effort will be to "counter covert efforts to influence our leaders and the general public", Sessions said. "Today, we see Chinese espionage not just taking place against traditional targets like our defense and intelligence agencies, but against targets like research labs and universities". "These threats must be ended", he said.

The administration has characterized China, along with Russian Federation, as a strategic competitor of the United States.

"No country presents a broader, more severe threat to our ideas, our innovation, and our economic security than China", FBI Director Christopher Wray said in a statement. It wants to keep working with China without sharing key technologies.

The Justice Department also filed a civil injunction on Thursday that would block the two companies from transferring the stolen technology or selling products based on the stolen technology in the United States.

The indictment was filed September 27 and unsealed Thursday, when the civil case was filed.

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